Oct. 17 (Bloomberg) -- China’s yuan rose to a 19-year high
after the central bank bolstered the currency’s reference rate
as U.S. holds the second presidential debate.

The People’s Bank of China raised the fixing by 0.12
percent to 6.3028 per dollar, the strongest since June 20. The
American presidential election and U.S. Deputy Secretary of
State William Burns’ visit to China have contributed to recent
appreciation in the yuan, central-bank publication Financial
News said in a commentary today. The yuan has advanced 2.3
percent since reaching this year’s low of 6.3967 on July 25. The
Chinese Communist Party will hold a congress starting Nov. 8
that may feature a once-a-decade leadership transition.

“China wants to ease the heat on yuan’s exchange rate as
the U.S. presidential elections are looming,” said Banny Lam, a
Hong Kong-based chief economist at CCB International Securities
Ltd., a unit of China’s second-largest bank. “There are also
bets that China will step up stimulus after the congress. Yet
the yuan could soften when these factors fade.”

The yuan rose 0.15 percent to close at 6.2545 against the
greenback in Shanghai, according to China Foreign Exchange Trade
System. The currency touched 6.2525 earlier, the strongest level
since the government unified the official and market exchange
rates at the end of 1993. The spot rate can trade as much as 1
percent on either side of the fixing.

Turning Bullish

Fortress Investment Group LLC turned bullish on China’s
yuan and equities, after betting on declines earlier in the
year, as it predicts the government will arrest a seven-quarter
slowdown in the world’s second-largest economy. A report
tomorrow may show gains in gross domestic product slowed to 7.4
percent last quarter, according to a Bloomberg survey of
economists. That would the slowest pace in three years.

In Hong Kong’s offshore market, the currency climbed 0.17
percent to 6.2536 per dollar, according to data compiled by
Bloomberg. Twelve-month non-deliverable forwards gained 0.09
percent to 6.3530, a 1.6 percent discount to the onshore rate.